AutoBeta(AutoBeta.net)08/11 Report--

According to the latest survey report released by China Automobile Circulation Association, the comprehensive inventory coefficient of automobile dealers in July 2021 was 1.45, down 24.1% year-on-year and 2.0% month-on-month, and the inventory coefficient fell below the warning line. The inventory factor has fallen for five consecutive months due to factors such as chip shortages and insufficient car capacity, the association said. In July, extreme weather occurred frequently and epidemic situation control in some areas was carried out. The market demand performance was unsatisfactory and the off-season characteristics were obvious.

In July, there were three major brand dealers whose inventory depth exceeded 2 months, namely Skoda, Chang 'an Automobile and FAW Hongqi.

Skoda brand dealer inventory level ranked first, related to Skoda's current market performance. SAIC Volkswagen launched its multi-brand strategy in 2005, officially introduced Skoda brand, and launched its first strategic model Mingrui in 2007. At present, SAIC Volkswagen Skoda brand has Xinrui, Mingrui, Speedpai, Kodiak, Krok, Komick and other products. Data show that Skoda sold 44,000 vehicles in China in the first half of 2021, down 43.1% year-on-year. Based on last year's epidemic situation, Skoda sales in China in the first half of this year not only did not achieve growth, but declined, let people sob.

From 2016 to 2018, SAIC Skoda brand has been hovering among 330,000 sales, but with the market ebb and competition intensified, brand differentiation gradually became prominent, and Skoda fell into the dilemma of marginalization. Even though SAIC Skoda has strengthened its SUV product layout in recent years, it has not actually brought significant growth to Skoda sales in China. Data show that Skoda sales in China peaked at 340,000 vehicles in 2018 and then declined all the way, from 340,000 in 2018 to 173,000 in 2020 in just three years.

A few days ago, there were media reports that Skoda had disbanded its marketing team in China, and the R & D team was also disbanded. In response to the above news, some media contacted Skoda officials for verification, and the official response was "this is false news." Although Skoda has repeatedly announced that it will never withdraw from the Chinese market, its sales decline is an indisputable fact. In the market under serious differentiation, Skoda seems to be more and more forgotten by consumers.

Independent brands Changan Automobile and FAW Red Flag were "named" for the first time. According to relevant data, Changan autonomous passenger car sales in July was 87,000 vehicles, wholesale sales of 99,000 vehicles. On July 30, FAW Hongqi announced that the sales volume in July was 25600 vehicles. FAW Hongqi announced the wholesale sales volume data, which has a certain gap with the sales volume finally reflected in the market. For example, FAW Hongqi sold 27000 vehicles in June this year, but according to the terminal retail data released by China Automobile Center, the retail sales volume of Hongqi brand in June was 20516 vehicles. It is understood that FAW Red Flag's sales target this year is 400,000 vehicles, up to now 42.65% of the target has been completed, the remaining 5 months need to complete the sales of 230,000 vehicles, the pressure is not small.

Why is the inventory depth of Changan Automobile and FAW Red Flag higher? According to the association, the impact of global chip shortage on luxury and joint venture brands continues to expand, the overall inventory level is further reduced compared with June, while the independent brands rely less on imported chips, and some manufacturers do not reduce their stock pressure, and the inventory level rises. In other words, chip shortage has less impact on independent brands, so automobile enterprises will try their best to increase wholesale sales and achieve annual sales targets as much as possible, which will cause greater pressure on dealers.

Facts have proved that the dealer inventory coefficient is often high, reflecting to a certain extent the development of automobile enterprises in the market. Manufacturers enter the sales target sprint stage at the end of the year, sales assessment tasks are aggravated, dealer inventory pressure may further increase, dealers rely on substantial preferential activities to accelerate digestion of inventory, boost the terminal market by means of price exchange, and although some brand inventory pressure has been slowed down in a short time, it has overdrawn market demand in advance, which is unfavorable to brand development.

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